Thursday, March 01, 2007

Intel versus AMD: recent events

A few factoids:

From a Seeking Alpha post of February 1, "AMD gained control of over 25% of the microprocessor market for the first time ever in Q4, according to preliminary data from Mercury Research. Its 25.3% share is a 2% quarter-over-quarter increase. Intel's share slipped to 74.4% from 76% -- its lowest share in over a decade."

Next, William Trent has a good chart showing Intel and AMD's inventory trends recently:It looks to me like Intel has a pile of pre-Core 2 Duo chips sitting in warehouses somewhere; while AMD has been selling its chips as fast as they can produce them until Intel released its newest chips.

Some commentators are indicating that AMD is looking at a cash flow problem due to its ATI acquisition and its need for investment in new plants.

"If AMD is bothered by Intel's lead in getting quad core on the market, it never let on. The company appears to be pacing itself with a slow and steady tactic, biding its time as software catches up to the technology.

"The adoption of quad-core technology will lag until the software catches up, so we aren't too concerned about Intel's lead, or rather, their perceived lead," said Steve Demski, AMD's Opteron product manager. "It isn't as big as it's made out to be."

Intel claims the up-take on its quad-core technology has been good so far though, pointing to Sun Microsystems Inc.'s decision to offer Intel-based servers as a sign of success, Fields said.

Sun used to offer exclusively AMD chips for its x86 Galaxy line, but gave in to customer demands and announced it plans to offer Intel in January.

"(Sun) chose Intel because of the performance and energy efficiency of Intel's quad-core products that are available today, and our future products," Fields said.

Months prior to Sun's headline-grabbing decision to partner with Intel, Dell Inc. added AMD chips to some of its servers, ending the exclusive relationship it had with Intel in the server space.

"Intel did beat AMD out of the gate with quad core, (but) the expectation is that AMD's quad-core processors will be faster when they arrive," Haff said. "This is a game of technical leapfrog. Especially in the server space, quad core does deliver increased application level performance for most workloads, and that's what users care about."

When AMD releases its quad-core processors, it will feature significant core enhancements, and the company estimates a whopping 40% performance advantage over Intel's current quad-core offerings.

Intel is, predictably, skeptical of the projections.

"As for their 40% claims on their future product, Intel is walking the walk and we will let the competition talk the talk," Fields said. "We are ramping quad-core technology today that delivers leading performance across industry standard benchmarks."

AMD does have reason for its steadfast optimism, with a history of benchmarks placing its processors ahead of Intel's.

For instance, a recent review of AMD Socket-F Opteron processors against Intel's Woodcrest chips by AnandTech Inc., an IT hardware analysis and news company, showed that AMD's Socket-F Opteron excelled in the areas of power consumption and performance per watt by as much as 29%."

My take: there are two major issues for both manufacturers. Server virtualization is going to decrease demand for physical servers, and there is little incentive for consumer purchasers to upgrade their machines given the powerful nature of the chips that have been sold in the last couple of years.